{"id":83404,"date":"2021-09-08T19:14:56","date_gmt":"2021-09-08T23:14:56","guid":{"rendered":"http:\/\/stateofthenation.co\/?p=83404"},"modified":"2021-09-08T19:14:56","modified_gmt":"2021-09-08T23:14:56","slug":"wow-u-s-treasury-secretary-warns-of-a-possible-october-default-on-u-s-debt","status":"publish","type":"post","link":"https:\/\/stateofthenation.co\/?p=83404","title":{"rendered":"<h2><b>WOW! U.S. Treasury Secretary warns of a possible October default on U.S. debt<\/b><\/h2>"},"content":{"rendered":"<p><!--more--><\/p>\n<div id=\"app\">\n<div>\n<div class=\"css-mcm29f\">\n<div aria-hidden=\"true\"><main id=\"site-content\"><\/p>\n<div>\n<article id=\"story\" class=\"css-1vxca1d e1qksbhf0\">\n<div class=\"css-avv6cj\">\n<div class=\"css-gvri2r\">\n<div class=\"css-8kn4zf\"><strong>Daily Business Briefing<\/strong><\/div>\n<\/div>\n<h1 class=\"css-ymxi58 e1h9rw200\" data-testid=\"headline\">Janet Yellen warns of a possible October default on U.S. debt, swollen by the pandemic.<\/h1>\n<div class=\"css-79elbk\" data-testid=\"photoviewer-wrapper\">\n<div class=\"css-1a48zt4 ehw59r15\" data-testid=\"photoviewer-children\">\n<figure class=\"css-1tfbz9u sizeMedium layoutHorizontal\" role=\"group\" aria-label=\"media\">\n<div class=\"css-bsn42l\"><picture><source srcset=\"https:\/\/static01.nyt.com\/images\/2021\/09\/08\/business\/08econ-brf-debt\/merlin_193098765_821ad175-c6df-48ab-b7dd-bfcd981accf6-mobileMasterAt3x.jpg?quality=75&amp;auto=webp&amp;disable=upscale&amp;width=600\" media=\"(max-width: 599px) and (min-device-pixel-ratio: 3),(max-width: 599px) and (-webkit-min-device-pixel-ratio: 3),(max-width: 599px) and (min-resolution: 3dppx),(max-width: 599px) and (min-resolution: 288dpi)\" \/><source srcset=\"https:\/\/static01.nyt.com\/images\/2021\/09\/08\/business\/08econ-brf-debt\/merlin_193098765_821ad175-c6df-48ab-b7dd-bfcd981accf6-mobileMasterAt3x.jpg?quality=75&amp;auto=webp&amp;disable=upscale&amp;width=1200\" media=\"(max-width: 599px) and (min-device-pixel-ratio: 2),(max-width: 599px) and (-webkit-min-device-pixel-ratio: 2),(max-width: 599px) and (min-resolution: 2dppx),(max-width: 599px) and (min-resolution: 192dpi)\" \/><source srcset=\"https:\/\/static01.nyt.com\/images\/2021\/09\/08\/business\/08econ-brf-debt\/merlin_193098765_821ad175-c6df-48ab-b7dd-bfcd981accf6-mobileMasterAt3x.jpg?quality=75&amp;auto=webp&amp;disable=upscale&amp;width=1800\" media=\"(max-width: 599px) and (min-device-pixel-ratio: 1),(max-width: 599px) and (-webkit-min-device-pixel-ratio: 1),(max-width: 599px) and (min-resolution: 1dppx),(max-width: 599px) and (min-resolution: 96dpi)\" \/><img loading=\"lazy\" decoding=\"async\" class=\"css-rq4mmj\" src=\"https:\/\/static01.nyt.com\/images\/2021\/09\/08\/business\/08econ-brf-debt\/merlin_193098765_821ad175-c6df-48ab-b7dd-bfcd981accf6-articleLarge.jpg?quality=75&amp;auto=webp&amp;disable=upscale\" sizes=\"auto, ((min-width: 600px) and (max-width: 1004px)) 84vw, (min-width: 1005px) 60vw, 100vw\" srcset=\"https:\/\/static01.nyt.com\/images\/2021\/09\/08\/business\/08econ-brf-debt\/merlin_193098765_821ad175-c6df-48ab-b7dd-bfcd981accf6-articleLarge.jpg?quality=90&amp;auto=webp 600w,https:\/\/static01.nyt.com\/images\/2021\/09\/08\/business\/08econ-brf-debt\/merlin_193098765_821ad175-c6df-48ab-b7dd-bfcd981accf6-jumbo.jpg?quality=90&amp;auto=webp 1024w,https:\/\/static01.nyt.com\/images\/2021\/09\/08\/business\/08econ-brf-debt\/merlin_193098765_821ad175-c6df-48ab-b7dd-bfcd981accf6-superJumbo.jpg?quality=90&amp;auto=webp 2048w\" alt=\"Janet Yellen, the Treasury secretary.\" width=\"600\" height=\"400\" \/><\/picture><\/div><figcaption class=\"css-13o4bnb e18f7pbr0\"><span class=\"css-16f3y1r e13ogyst0\" aria-hidden=\"true\">Janet Yellen, the Treasury secretary.<\/span><span class=\"css-cnj6d5 e1z0qqy90\"><span class=\"css-1ly73wi e1tej78p0\">Credit&#8230;<\/span>Pool photo by\u00a0Greg Nash<\/span><\/figcaption><\/figure>\n<\/div>\n<\/div>\n<div class=\"css-158auor\">\n<div class=\"css-txafxr epjyd6m1\">\n<div class=\"css-qjvuz9 ey68jwv0\" aria-hidden=\"true\"><\/div>\n<div class=\"css-233int epjyd6m0\">\n<p class=\"css-aknsld e1jsehar1\"><span class=\"byline-prefix\">By\u00a0<\/span><span class=\"css-1baulvz\">Alan Rappeport<\/span>\u00a0and\u00a0<span class=\"css-1baulvz last-byline\">Jonathan Weisman<br \/>\nThe New York Times<\/span><\/p>\n<\/div>\n<\/div>\n<ul class=\"css-1u1psjv epjyd6m3\">\n<li class=\"css-ccw2r3 epjyd6m2\"><time class=\"css-ld3wwf e16638kd2\" datetime=\"2021-09-08T18:39:07-04:00\"><span class=\"css-1sbuyqj e16638kd3\">Sept. 8, 2021 <\/span><span class=\"css-15rjoqi e16638kd4\">Updated\u00a0<span class=\"css-epvm6\">6:39 p.m. ET<\/span><\/span><\/time><\/li>\n<\/ul>\n<\/div>\n<\/div>\n<section class=\"meteredContent css-1r7ky0e\">\n<div class=\"css-1fanzo5 StoryBodyCompanionColumn\">\n<div class=\"css-53u6y8\">\n<p class=\"css-axufdj evys1bk0\">WASHINGTON \u2014 The United States could default on its debt sometime in October if Congress does not take action to raise or suspend the debt limit, Treasury Secretary Janet L. Yellen warned on Wednesday.<\/p>\n<p class=\"css-axufdj evys1bk0\">The \u201c<a class=\"css-1g7m0tk\" title=\"\" href=\"https:\/\/www.nytimes.com\/2021\/07\/23\/us\/politics\/janet-yellen-debt-ceiling.html\">extraordinary measures<\/a>\u201d that the Treasury Department has been employing to finance the government on a temporary basis since Aug. 1 will be exhausted next month, Ms. Yellen said\u00a0<a class=\"css-1g7m0tk\" title=\"\" href=\"https:\/\/home.treasury.gov\/system\/files\/136\/Debt-Limit-Letter-to-Congress_20210908_FINAL-Pelosi.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">in a letter to lawmakers<\/a>. She added that the exact timing remained unclear but that time to avert an economic catastrophe was running out.<\/p>\n<p class=\"css-axufdj evys1bk0\">\u201cOnce all available measures and cash on hand are fully exhausted, the United States of America would be unable to meet its obligations for the first time in our history,\u201d Ms. Yellen wrote.<\/p>\n<p class=\"css-axufdj evys1bk0\">To delay a default, Treasury has in the last month suspended investments in the Civil Service Retirement and Disability Fund, the Postal Service Retiree Health Benefits Fund and the Government Securities Investment Fund of the Federal Employees Retirement System Thrift Savings Plan.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"><\/aside>\n<\/div>\n<div class=\"css-1fanzo5 StoryBodyCompanionColumn\">\n<div class=\"css-53u6y8\">\n<p class=\"css-axufdj evys1bk0\">The distribution of pandemic relief payments this year and uncertainty over incoming tax payments this month have made it more challenging than usual to predict when funds will run out. Ms. Yellen said that a default would cause \u201cirreparable harm\u201d to the U.S. economy and to global financial markets and that even coming close to defaulting could be harmful.<\/p>\n<p class=\"css-axufdj evys1bk0\">\u201cWe have learned from past debt limit impasses that waiting until the last minute to suspend or increase the debt limit can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers and negatively impact the credit rating of the United States,\u201d she wrote.<\/p>\n<p class=\"css-axufdj evys1bk0\">Democratic leaders have been insisting for months that Republicans join them in raising the debt ceiling, saying the government hit its last debt limit because of the spending and tax cutting of the Trump administration, what Speaker Nancy Pelosi of California on Wednesday called \u201cthe Trump credit card.\u201d<\/p>\n<p class=\"css-axufdj evys1bk0\">But Senator Mitch McConnell of Kentucky, the Republican leader, has been just as emphatic that he will keep Senate Republicans from helping Democrats on the issue. Democrats may try to attach the increase to measures such as an emergency spending bill to pay for relief and reconstruction after Hurricane Ida, wildfires and heat waves from the summer \u2014 daring senators from Louisiana and Western states to vote no.<\/p>\n<p class=\"css-axufdj evys1bk0\">The showdown has again put the parties into a game of chicken, with a debt default and potential economic crisis as the consequence.<\/p>\n<\/div>\n<\/div>\n<div class=\"css-1fanzo5 StoryBodyCompanionColumn\">\n<div class=\"css-53u6y8\">\n<p class=\"css-axufdj evys1bk0\">Ms. Pelosi, at her weekly news conference on Wednesday, said emphatically that Democrats would not include a statutory increase in the government\u2019s borrowing authority in a budget bill being drafted this month. That bill, under complicated budget rules, could pass without Republican votes in the Senate.<\/p>\n<p class=\"css-axufdj evys1bk0\">Instead, Democratic leaders will dare Senate Republicans to filibuster a bill that does raise the debt ceiling.<\/p>\n<p class=\"css-axufdj evys1bk0\">\u201cWe Democrats supported lifting the debt ceiling\u201d during the Trump administration, she said, \u201cbecause it was the responsible thing to do.\u201d She added, \u201cI would hope that the Republicans would act in a similarly responsible way.\u201d<\/p>\n<p class=\"css-axufdj evys1bk0\">Democrats have several options they are considering. The government will run out of operating funds at the end of the month, so a debt ceiling increase could be attached to a stopgap spending measure \u2014 meaning a Republican filibuster would not only jeopardize the government\u2019s full faith and credit, it could shut down the government.<\/p>\n<p class=\"css-axufdj evys1bk0\">Democrats could also attach it to a major infrastructure bill that passed the Senate with bipartisan support and is supposed to get a House vote by Sept. 27.<\/p>\n<p>__<br \/>\n<a href=\"https:\/\/www.nytimes.com\/2021\/09\/08\/business\/economy\/united-states-debt-default.html\">https:\/\/www.nytimes.com\/2021\/09\/08\/business\/economy\/united-states-debt-default.html<\/a><\/p>\n<\/div>\n<\/div>\n<\/section>\n<\/article>\n<\/div>\n<p><\/main><\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-83404","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/stateofthenation.co\/index.php?rest_route=\/wp\/v2\/posts\/83404","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stateofthenation.co\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stateofthenation.co\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stateofthenation.co\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/stateofthenation.co\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=83404"}],"version-history":[{"count":0,"href":"https:\/\/stateofthenation.co\/index.php?rest_route=\/wp\/v2\/posts\/83404\/revisions"}],"wp:attachment":[{"href":"https:\/\/stateofthenation.co\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=83404"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stateofthenation.co\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=83404"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stateofthenation.co\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=83404"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}